New Zealand came up a whopping $15.16 billion short in its dealings with the rest of the world in the year ended June - the biggest shortfall, relative to the size of the economy, since the oil shock days of 1975.
ANZ National Bank chief economist Cameron Bagrie said the current account deficit was "monstrous".
"We have been saying it is close to a turning point for 18 months, but it keeps on getting worse. Will a lower dollar really turn it around materially? I suspect not. I think the only way to get it back down below 5 per cent [of gross domestic product] is to have an outright domestic recession."
The dollar fell more than half a cent on the worse-than-expected figure, which economists estimate to be equivalent to 9.6 or 9.7 per cent of GDP - that is, every bit as bad as the March year's deficit or slightly worse.
As a rule, any figure above 5 per cent of GDP means the stock of foreign claims on the economy is growing faster than the economy itself.
Some glimmers of hope could be found in the data, however.
Comparing the year ended June with the year ended March, the balance on trade in goods and services improved by $334 million, though it was still in the red by $3.8 billion.
But it was dwarfed by an $11.9 billion gap between what foreign investors earn in New Zealand (including interest on debt) and the return on New Zealand investment abroad.
That was $720 million more than for the year ended March. The increase reflected higher profits for foreign companies in New Zealand and a rising interest bill.
At the end of June net foreign claims on the New Zealand economy were $130 billion, of which $113 billion was debt - or $27,400 for every man, woman and child.
Most of the $15.16 billion current account deficit was funded by a $13 billion increase in net debt over the year, and most of that was a $10 billion increase in bank borrowings.
"Despite prospects for slower growth ahead and a gargantuan current account deficit, there is still little difficulty in getting foreigners to fund the deficit," Bagrie said.
"New Zealand's absolute interest rate levels remain attractive, particularly with prospects for further interest rate increases on the table, and there is a glut of savings in Asia."
But continually selling the family silverware to fund the deficit was clearly not sustainable, and left New Zealand vulnerable should there be a shift in foreign investor sentiment.
It was premature to talk of a turnaround in the trade accounts, he said.
While exports had risen $680 million in the quarter, reflecting higher prices and bigger volumes, much of the increase was in pastoral exports. Since then the weather had deteriorated and the dollar rebounded.
Deutsche Bank chief economist Darren Gibbs does not see the deficit getting a lot worse, but said the recovery would be gradual.
The broad trend in the exchange rate was right for a continued improvement in the trade accounts, he said. "In the context of a world economy, that is still fairly robust. You would expect exports to do okay, and with the Reserve Bank clamping down on the household sector you would expect to see imports continue to struggle.
"To get a big change in the trend in investment income - and given that it is the majority of the current account deficit, that is where the improvement has got to come from - you really need to see the economy weaken so that interest rates fall and profits fall."
Bagrie said the risk of a credit rating downgrade was no longer trivial, but it was difficult to envisage given the strength of the Government's accounts - with fiscal surpluses for the past 13 years and net debt declining to 5.3 per cent of GDP.
But the tax take swings around substantially with the economic cycle and the buffer of projected Budget surpluses could quickly erode.
Gibbs said the ratings agencies were always more relaxed about current account deficits that were not the government's doing but reflected private sector transactions.